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NSBA report shows on-bill financing improves energy efficiency

The National Small Business Association (NSBA) has released a report showing that small business collectively could reduce greenhouse gas emissions by 259 million tons each year if they improved their energy efficiency by just 25%. The report, “On-Bill Financing:  Helping Small Business Reduce Emissions and Energy Use While Improving Profitability,” goes on to highlight the significant savings small businesses stand to achieve through on-bill financing.

“This report obliterates that old paradigm that environmental conservation is anathema to economic growth,” said NSBA President Todd McCracken. “Quite simply, small businesses can increase their profitability while reducing their carbon footprint.”

On-bill financing is a mechanism that enables small businesses to work with their utility company to improve their energy efficiency. In practice, a local utility company identifies a small business with potential savings and evaluates their energy use and the company’s financial stability. The utility company then extends a low- or no-interest loan to the small business to make energy-efficient upgrades. The small-business owner repays the loan by continuing to pay the average monthly bill and any money paid in excess of what their actual costs are will go directly to pay down the loan.

On-bill financing efficiency programs are under development in Illinois and Michigan and now operate in several states including Arkansas, California, Connecticut, Hawaii, Kansas, Massachusetts, New Jersey and Rhode Island, according to NSBA research. According to the report, energy-efficiency programs such as on-bill financing can help the average small business save $4,932—and oftentimes more—every year on its energy bills. The report also makes recommendations on how the federal government can help facilitate additional on-bill financing programs.

“The number one reason small-business owners cite for their inability to make their firms more energy efficient is cash-flow,” stated Keith Ashmus, NSBA chair and co-founding partner at Frantz Ward LLP, Cleveland, Ohio. “Programs such as on-bill financing can eliminate this very significant barrier.”

NSBA has long held the belief that energy efficiency and entrepreneurial growth can and do go hand-in-hand. The current state of the U.S. economy makes it absolutely crucial to have government policies that foster, not hinder, entrepreneurial growth. With 29.6 million small firms—comprising 99.7% of all U.S. employer firms—small businesses stand to make significant, positive and lasting improvements to both the economy and the environment.

This report was sponsored by NSBA with funding from the Bipartisan Policy Center. To download the full report, click here .

NSBA has advocated on behalf of America’s entrepreneurs since 1937. For more information, please visit www.nsba.biz.


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